Marks and Spencer strategy for womenswear is a stopgap that could be so much better

Outlook

M&S charges more for flowers in hospital shops than it does in high street stores (Getty Images)

Marc Bolland is proving yet again what a great grocer he is. No, really. Against a backdrop of falling food prices and brutal competition, most supermarkets celebrate when sales at stores open at least a year fall by a bit less than analysts’ forecasts. At Bolland’s M&S they are rising. Add in the impact of a rash of new openings and things are looking really good.

What’s more, M&S operates in a premium part of the market, which traditionally does best during the festive season when shoppers treat themselves by trading up. So the future looks tasty indeed.

Trouble is, M&S isn’t just judged by its food offering, despite the latter’s ever-growing importance. It is still primarily judged on “general merchandise” – in other words, womenswear.

And there, things are as bad as they’ve ever been. Sales continue to decline. Younger people have long shunned M&S clothing. What should disturb anyone with an interest in the company is that their parents are increasingly of the same mind.

Having singularly failed to change that, despite periodically rearranging the management deckchairs, Mr Bolland now appears to be throwing in the towel.

He’s not focusing on growing sales any more so much as he is on squeezing more profits out of the declining number of customers he’s managing to keep on board.

This does appear to be working for the business. For now. Underlying profits are rising again. So are margins.

But is this a sustainable long-term strategy? That remains open to question. There are all sorts of ways of boosting margin. You can source your product more cheaply, and M&S says it’s having some success with that, although there are limits.

M&S is also cutting the number of promotions and selling more of its clothes at full price. But again that will only get you so far. Shoppers have more money in their pockets now that wage growth is finally outstripping inflation, but they still like a bargain. They can only be squeezed so much before they’ll look elsewhere.

Investors don’t seem too fussed about all this. Their divvy is up, and their shares have had a good run. Mr Bolland isn’t likely to be asked to change his plans to stay on for another couple of years. After which time it will be someone else’s turn to have a go.

It might, at some point, occur to someone on the appointments committee that it wouldn’t be a bad idea for a company so synonymous with womenswear to try appointing a woman to turn the business around. It might. But it probably won’t.